State Legislative Round Up

With the start of the new year, a number of state legislatures are reconvening. Quite a few states have significant research, science, and technology issues on their legislative calendar, including the following:

Nebraska

Governor Mike Johanns has proposed the creation of a tax credit for a variety of industries, including R&D firms, to encourage job creation, higher wages and investment in rural Nebraska. The plan would offer an income tax credit equal to five percent of the compensation paid for new employment and an additional income tax credit equal to ten percent of the new investment. While development projects in the entire state are eligible, those projects in the most distressed areas would have to meet lower investment or job creation thresholds to receive the credit.

New York

Governor George Pataki has proposed the establishment of Upstate High Technology Enterprise Zones to encourage technology-based economic development in those areas where job growth is below the state average. The plan includes a series of tax credits for research and development, job creation, and business investment. Companies expanding their employment in the zones beyond 25 people would be eligible for $500-$1,000 credits per job, based on the wages paid.

Tennessee

The legislature appears to be likely to approve a $28.3 million sales tax exemption for construction costs associated with federal research facilities.  Proponents say the exemption will secure Oak Ridge National Laboratory as the site for the proposed $1.3 billion, federal Spallation Neutron Source. According to an article in The Tennessean, federal officials have threatened to relocate the facility to New York or New Mexico if construction costs for the federal project is subject to the sales tax. The state is currently facing a budget shortfall of almost $400 million.

Virginia

As part of his biennial budget proposal, Governor Gilmore has requested a 150 percent increase for Virginia’ Center for Innovative Technology. If approved, CIT would receive more than $32 million in FY 2002 to support its existing portfolio of programs and the Technology Competitiveness Fund, a proposed $20 million higher education research initiative. The Fund would have three components: matching funds to leverage public and private dollars, a program to upgrade national ranking of universities, and an industry inducement program.